Kiera Jefferson
In 2015, the Environmental Protection Agency (EPA) discovered that many VW cars sold in America had a defeat device in their diesel engines that could detect when they were being tested, altering performance to improve results. VW admitted that about 11 million cars worldwide were fitted with this device, which caused the cars to emit up to 40 times more pollution than allowed. This scandal led to a significant financial impact on VW, with a loss of €3.5 billion and a drop in share prices, as well as legal consequences, including fines, penalties, and settlements. The repercussions also extended beyond VW, impacting the reputation of the German car industry and leading to investigations into other car manufacturers. The scandal raised awareness about the higher levels of pollution emitted by diesel-powered vehicles, and VW has since taken steps toward a cultural shift, focusing on sustainability and ethical practices.
| Characteristics | Values |
|---|---|
| Number of cars affected in the US | 482,000 |
| Number of cars affected worldwide | 11 million |
| Number of cars recalled in Europe | 8.5 million |
| Number of cars recalled in Germany | 2.4 million |
| Number of cars recalled in the UK | 1.2 million |
| Number of cars recalled in the US | 500,000 |
| Number of premature deaths caused in the US | 59 |
| Percentage increase in low birth weight rate per 1,000 cars | 1.9% |
| Percentage increase in infant mortality rate | 1.7% |
| Maximum amount of pollution emitted above the limit | 40 times |
| Maximum amount of fine | $46 billion |
| Amount VW paid in fines, penalties, financial settlements and buyback costs | $33.3 billion |
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What You'll Learn
- VW's emissions cheating caused up to 40 times more pollution than allowed
- The scandal led to investigations into other carmakers
- VW's reputation was damaged, and it faced significant financial losses
- Executives were found guilty and received prison sentences
- VW shifted its focus to electric and hybrid vehicles
VW's emissions cheating caused up to 40 times more pollution than allowed
In 2015, the Environmental Protection Agency (EPA) in the United States discovered that many VW cars sold in the country had a "defeat device" in their diesel engines. This device allowed the vehicles to recognise when they were being tested and adjust their performance to improve results. As a result, VW's emissions cheating caused their cars to produce up to 40 times more pollution than allowed.
The scandal, dubbed the "diesel dupe", led to VW recalling 8.5 million cars in Europe and 500,000 in the US. The company also admitted that about 11 million cars worldwide were fitted with the defeat device, including eight million in Europe. The scandal had a significant financial impact on VW, with shares falling by about a third and the company pushed €3.5 billion into the red in the quarter following the scandal.
The EPA described the hidden Volkswagen pollution as "knowing endangerment", and VW faced legal action and fines in both the US and Europe. The scandal also raised awareness about the higher levels of pollution emitted by diesel-powered vehicles from various carmakers, which exceeded legal emission limits under real-world driving conditions. Car analysts at the financial research firm Bernstein noted that almost 90% of diesel vehicles didn't meet emission limits when driven on the road.
To address the scandal, VW appointed Porsche chief Matthias Müller as group chief executive. The company blamed a “small group" of individuals and suspended a few employees. VW also announced spending cuts of £750 million to fund a product revamp focusing on electric and hybrid vehicles. VW's then-chief executive, Martin Winterkorn, expressed his apologies, but he insisted he was “not aware of any wrongdoing" and did not initially resign.
The impact of the scandal extended beyond VW, reshaping Europe's relationship with diesel technology. Before 2015, diesel vehicles accounted for over half of Europe's car market, marketed as environmentally friendly. However, the scandal brought about a shift in consumer and regulatory attitudes towards diesel, with growing concerns about the higher pollution levels associated with diesel engines.
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The scandal led to investigations into other carmakers
The Volkswagen emissions scandal, also known as the "diesel dupe", involved the company admitting to cheating emissions tests in the US. VW used a "'defeat device' or software in diesel engines that could detect when they were being tested, changing performance to improve results. This affected 482,000 cars in the US and about 11 million cars worldwide.
A study conducted by ICCT and ADAC showed the biggest deviations from emission standards were from Volvo, Renault, Jeep, Hyundai, Citroën, and Fiat, resulting in investigations into other diesel emissions scandals. This sparked a discussion about the potential for software-controlled machinery to be prone to cheating, and the possibility of open-sourcing software for public scrutiny.
The Volkswagen emissions scandal had far-reaching consequences, leading to investigations and increased scrutiny of other carmakers' practices, particularly regarding diesel engine emissions. It also highlighted the issue of software manipulation and the potential for cheating, raising questions about the environmental friendliness of diesel vehicles.
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VW's reputation was damaged, and it faced significant financial losses
The Volkswagen emissions scandal, dubbed "Dieselgate", significantly damaged the company's reputation and resulted in substantial financial losses. The scandal centred around VW's use of "defeat devices" or software that could detect when vehicles were being tested, allowing them to cheat on emissions tests and emit higher levels of pollution than allowed.
VW admitted that about 11 million cars worldwide were fitted with these defeat devices, including 482,000 cars in the US and 8.5 million cars in Europe. The company faced a wave of criticism and backlash from consumers, regulators, and governments. VW's shares plummeted, with about a third of their value wiped out in the immediate aftermath of the scandal. The company also faced numerous legal claims and lawsuits, resulting in significant financial costs.
In the US alone, VW was ordered to pay billions of dollars in criminal fines, financial settlements, and buyback costs. By June 2020, the scandal had cost VW $33.3 billion. The company also incurred additional expenses, such as the cost of recalling and repairing affected vehicles, as well as spending cuts to fund a product revamp towards electric and hybrid vehicles.
The scandal had far-reaching consequences, reshaping Europe's relationship with diesel technology and leading to a decline in diesel car sales. VW's reputation was severely damaged, and the company faced a challenging path towards rebuilding trust and rehabilitating its image. VW's transformation involved a cultural shift towards a more ethical, collaborative, and purpose-driven organisation, with a focus on sustainability and e-mobility.
The repercussions of the scandal extended beyond financial losses and damaged reputations. A study published in Environmental Research Letters estimated that the excess pollution produced by vehicles equipped with defeat devices in the US would cause approximately 59 premature deaths between 2008 and 2015. Additionally, the scandal raised awareness about the higher levels of pollution emitted by diesel-powered vehicles, which often exceeded legal emission limits under real-world driving conditions.
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Executives were found guilty and received prison sentences
In 2015, the Volkswagen emissions scandal, also known as "Dieselgate", came to light. The US Environmental Protection Agency (EPA) accused Volkswagen of cheating on emissions tests to meet regulatory standards. The company admitted to installing software in its diesel engines that activated emissions controls only during laboratory testing. This meant that while the cars appeared to adhere to US standards when tested, they emitted up to 40 times more nitrogen oxide pollutants than permitted during normal operation.
The scandal resulted in significant consequences for Volkswagen, including a major recall of vehicles, a drop in share prices, and numerous legal claims and penalties. Several Volkswagen executives were also found guilty of fraud and received prison sentences.
In May 2025, four former Volkswagen executives were sentenced to prison terms ranging from over four years to over one year in prison, with two receiving suspended sentences. The longest prison sentence was handed to former head of Volkswagen's diesel engine development, Jens Hadler, who received four and a half years for his involvement in the emissions testing fraud. The next longest sentence was given to former head of engine electronics, Hanno Jelden, who was sentenced to two years and seven months in prison. Emissions expert Thorsten D. and former components development head, Heinz-Jakob Neusser, received suspended sentences of one year and ten months, and one year and three months, respectively.
In addition to these sentences, dozens more executives still await trial, including former CEO Martin Winterkorn, who resigned over the scandal but denied any wrongdoing. An arrest warrant was issued for Winterkorn in 2018, but his trial in Germany was paused in 2021 due to health issues.
The Volkswagen emissions scandal had far-reaching impacts and led to increased scrutiny of the automotive industry's emissions testing practices and the push for the development of zero-emissions vehicles. It also raised awareness of the higher levels of pollution emitted by diesel-powered vehicles, which exceeded legal emission limits under real-world driving conditions.
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VW shifted its focus to electric and hybrid vehicles
In 2015, the Environmental Protection Agency (EPA) discovered that several VW cars sold in America were equipped with a "defeat device" that could detect when they were being tested and adjust performance to improve results. This scandal, dubbed the "diesel dupe", led to the recall of 8.5 million cars in Europe and 500,000 in the US, causing a significant drop in VW's share price.
In the aftermath of this scandal, VW announced a significant shift in its strategy, aiming to become a world leader in clean-energy vehicles. The company planned to cut 30,000 jobs and save €3.7 billion annually by 2020, while also investing in future technologies like electric cars, self-driving cars, and digitalization. VW targeted selling one million electric cars per year by 2025 and becoming the global market leader in electromobility. This shift was driven by environmental concerns and the need to revive its fortunes after the emissions cheating scandal.
VW's push into the electric vehicle market involves retooling factories in Emden and Hanover to focus on electric car production. The company also plans to separate its Lamborghini supercar and Ducati motorbike brands, streamlining operations to focus on mass-producing electric cars. VW recognizes the competition from Tesla in the electric vehicle market and aims to leverage its established dealership network to gain an advantage.
To support this transition, VW is investing in software programming expertise to develop intelligent self-driving vehicles. The company's Electrify America charging plan, included with its electric cars, offers added convenience for customers. VW's electric vehicle lineup includes the ID.4 Pro, offering an EPA-estimated range of 291 miles, and the upcoming ID. Buzz.
In conclusion, VW's emissions cheating scandal served as a catalyst for the company to accelerate its shift towards electric and hybrid vehicles. By investing in new technologies, streamlining operations, and targeting ambitious sales goals, VW aims to become a leader in the clean-energy vehicle market while recovering from the reputational damage caused by the scandal.
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Frequently asked questions
VW's emissions cheating resulted in cars emitting up to 40 times more pollution than emissions standards allow. The excess pollution produced by vehicles equipped with the defeat device in the US between 2008 and 2015 is estimated to have caused 59 premature deaths.
The scandal had a significant impact on VW's business and the auto market in Europe. VW's shares fell by about a third, and the company incurred costs of $33.3 billion in fines, penalties, financial settlements, and buyback costs as of June 2020. The scandal also led to a push for VW to focus on electric and hybrid vehicles, with the company allocating £750 million in spending cuts for a product revamp.
VW recalled 8.5 million cars in Europe and 500,000 in the US as a result of the scandal. VW also offered $1,000 gift cards as a goodwill package to US drivers and agreed to pay a $2.8 billion criminal fine in April 2017. Four former VW executives received prison sentences for their roles in the scandal, and the company's former CEO, Martin Winterkorn, was charged with fraud and conspiracy in the US in May 2018.
